patrick.net

cisTits says

The average 30-year fixed mortgage rate spiked to 6.39% today, according to Mortgage News Daily, having bounced by 40 basis points in two days off the low of 5.99% on Thursday, giving up a month worth of declines in two days.

Good. Mortgages need to go up to 7.5% to 8%.

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I did attend his meetings years ago.
I like his academic style presentation with supporting research.
He is a very good motivator.

Home-Buying Companies Stuck With Hundreds of Houses as Demand Slows

https://archive.is/BXokx

The boomers are sick and dying thanks the the vax and being old. Give it a couple years and the mass glut of boomer property on the market will swamp potential buyers with cheap housing.

https://finance.yahoo.com/news/biden-one-size-fits-plan-150000623.html

Looks like Biden is trying to put a lot of smaller landlords out of business. They will sell their housing stock.

https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/

Do HOA dues ever go down?

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/

Do HOA dues ever go down?

Does Pope shit in the woods?

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/10x4qxg/hold_your_ground_when_the_listing_agent_comes/

Yesterday morning, our offer $13k under asking was accepted. Yesterday afternoon, they “received a full price bid” and were going to be so kind as to let us match the full price if we really wanted the house. We “regretfully declined” to increase our offer at 5:00pm

This morning, at 8:57am, our offer was accepted again.

Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

,

ad says

This will help as far as government reported inflation (i.e., CPI).

It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.

Al_Sharpton_for_President says

It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.

True about "owner equivalent rent", the Bureau of Labor Statistics (BLS) tracks rental prices by sampling about 50,000 rental units nationwide and uses the average rents paid for comparable housing (within the same area or zip code).

So they would have to find a comparable rental for my home (3 bedroom, 2.5 bath, 2 car garage, 2 miles from beach in Florida panhandle); they could query some of the rentals in my HOA which are identical in size and design.

I guess for more unique homes which are not "cookie cookie cutter" like detached 4 bedroom homes in non-HOA neighborhoods, the BLS would have to adjust and extrapolate the best they can to apply the "owner equivalent rent" method.

I understand that is the best way for CPI to aggregate or account for housing related cost for owner occupied homes.

I also read CPI considers housing related cost to be 33% of total CPI.

I recall FHA and VA mortgage allows up to around 35% of income to be for housing costs (mortgage, property tax, property insurance and HOA fee).

.

But I look at the CPI as just a gauge as far as housing trends such as if housing costs are trending down for last 6 months in general.

ad says

Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

@ad,

Do you see rental softness in your market? It’s down 5.4% from the peak in August, but still up 2.4% YoY. This trend won’t last very long in the next few months, but 5.4% seems insignificant given rent prices have gone through the roof in the last decade.

In my San Jose market, rents are holding steady while rents around SJSU hit record high. I guess more people are going back to school in the current economic environment.

Eman says

Do you see rental softness in your market?

I see more deals being made by apartment owners such as give 1 month rent free for a 13 month lease.
.

https://www.reddit.com/r/REBubble/comments/10z2hf7/did_you_move_away_from_your_place_of_employment/

This happened to my neighbor. She moved out of the city and loved it but then a while ago her business said they had to come back 2 or 3 days a week. She moved a bit closer but the train was still pain so she would do 1-2 days? They laid her off in the first round.

Booger says

https://www.reddit.com/r/REBubble/comments/10z2hf7/did_you_move_away_from_your_place_of_employment/

This happened to my neighbor. She moved out of the city and loved it but then a while ago her business said they had to come back 2 or 3 days a week. She moved a bit closer but the train was still pain so she would do 1-2 days? They laid her off in the first round.

Ouch.

Booger says

This happened to my neighbor.

I suspect employers do this since they have leverage over the employee. What company laid off your neighbor ?

.

ad says

What company laid off your neighbor ?

It was a quote from a reddit post. Not an actual neighbor of mine

https://finance.yahoo.com/news/us-home-prices-heading-further-113000350.html

cisTits says

The hopes of an average 30-year fixed mortgage rate in the 5%-range that were widely bandied about in January have now vanished.

Maybe sign up for a 7 year ARM and then refinance before the expiration date for the mortgage. US Bank is advertising today a rate of 5.6% for a 7 year ARM.

Navy Federal Credit Union advertises a 4.75% rate for 5 year (5/5) conforming ARM.

I know the prime rate is usually about 2.25% greater than than Fed Funds rate, and the prime rate is used such as with HELOC's, business loans, etc.

The 30 year mortgage rate is a lot less reliable than the prime rate as far as tracking the Fed Funds rate, inflation rate, etc.

Anyone have any experience with Ally Bank? They have 5 year CD's for above 4% rate of interest

gabbar says

Anyone have any experience with Ally Bank? They have 5 year CD's for above 4% rate of interest

I've been banking with Ally for several years and almost did my home loan through them, but I got a better deal with a local bank. Ally is awesome. I've never invested in their CDs though.

gabbar says

Anyone have any experience with Ally Bank? They have 5 year CD's for above 4% rate of interest

You mean they have a rate below inflation and you'll be taxed on the interest you earn? Some deal.

gabbar says

Anyone have any experience with Ally Bank? They have 5 year CD's for above 4% rate of interest

The 3 year UST is yiielding 4.34%. And you can always sell it in the money if and when the Fed pivot occurs and rates go down. For example, it was around 1.5% in March 2022.

gabbar says

Anyone have any experience with Ally Bank? They have 5 year CD's for above 4% rate of interest

You may want to check local Credit Unions. This is a current offer from Langley FCU near me:



5% and no need to tie up money for 60 months.

6 month UST is yielding over 5% and you can roll it over into another 6 month that will probably be offering an even higher return.

Al_Sharpton_for_President says

6 month UST is yielding over 5% and you can roll it over into another 6 month that will probably be offering an even higher return.

How does one buy UST? Just want to learn. I want to put some money away and forget it for 5 years.

gabbar says

How does one buy UST?

You can buy them through your broker. You can also buy them direct from the gubberment. (https://www.treasurydirect.gov). I've only purchased through a broker, like Schwab, so I have no experience with buying direct.

BayArea says

Eman says

From my real estate network, the last 3-4 weeks suggested the market is in a holding pattern. Buyers, who used to qualify for $1.8-$2.2M, are getting bumped down to $1.5-$1.8M due to higher interest rate.

Buyers have become more selective. However, homes in good location still sell nicely. Does 2022 feel like 2006 now?

No because loans aren’t being written to people with nothing more than a pulse.

I agree with your mortgage qualification amounts however… And it happened very quickly too!

I have 60k in Roth IRA. Does it make sense to put it in a UST or CD for 5 years?

gabbar says

I have 60k in Roth IRA. Does it make sense to put it in a UST or CD for 5 years?

Max out the Roth annually if you can AND if you have an HSA max that out. Those are your best long term tax deferred vehicles. 401K's are good, but none of us know what taxes will be if retirement is 20-30 years out. Either way I'd max all three out.

Ultimately though your best return is going to be business or real estate. Risky, but the tax write offs are insane if you know what you're doing. As users here have mentioned, they have a vacation rental in Hawaii, guess what you can write off your travel to visit your own property. You get to depreciate it lowering your income taxes annually for 27.5 years. There's all sort of massive benefits to owning a business or real estate. It's just what is your risk tolerance.

WookieMan says

gabbar says

I have 60k in Roth IRA. Does it make sense to put it in a UST or CD for 5 years?

Max out the Roth annually if you can AND if you have an HSA max that out. Those are your best long term tax deferred vehicles. 401K's are good, but none of us know what taxes will be if retirement is 20-30 years out. Either way I'd max all three out.

Ultimately though your best return is going to be business or real estate. Risky, but the tax write offs are insane if you know what you're doing. As users here have mentioned, they have a vacation rental in Hawaii, guess what you can write off your travel to visit your own property. You get to depreciate it lowering your income taxes annually for 27.5 years. There's all sort of massive benefits to owning a business or real estate. It's just what is your risk tolerance.

I have been trying to max out those 3. What do you think is the best way to give cash to one's children or grandchildren?

gabbar says

What do you think is the best way to give cash to one's children or grandchildren?

In cash and in amounts that won't trigger the bank money laundering algorithm. Or just pay some of their bills directly.

gabbar says

I have been trying to max out those 3. What do you think is the best way to give cash to one's children or grandchildren?

Oxygen mask. Worry about taking care of yourself like you'll live to 100. Kids will become adults and figure it out if they have good family structure. If there's any inkling mom and dad or grandparents are going to pay for stuff it takes the drive out of them. I'm witnessing it right now with some peers that had kids at a very young age. It's a contentious topic, but until you are good, don't worry about it.

Obviously get a will in case you go early and the kids don't have to go through the whole probate process. I am not knowledgable at all in this, but I believe you want to set up any funds you do intend to leave them in a trust. If you're loaded you could also gift them the money tax free over the years as well. Again, giving away money enables people, generally speaking. Some can handle it. Most can't and become spoiled brats. Slippery slope.

But you can gift $17k a year now and the receiver of the gift pays no taxes on it. So if you're rolling in money and are good to 100 years of age, you could start offloading it to family. I wouldn't advise this though, but everyone has there reasons. Not my place to judge. Here's info on that. https://www.nerdwallet.com/article/taxes/gift-tax-rate

Key is the will. So if you die tomorrow there's not family infighting over your assets. My dad was an attorney and that shit destroys families after someone with solid finances dies without a will. It gets messy.

WookieMan says

Key is the will. So if you die tomorrow there's not family infighting over your assets. My dad was an attorney and that shit destroys families after someone with solid finances dies without a will. It gets messy.

That is sad unfortunately not uncommon.
Have a trust that (online DIY) can not cost you much and mention the equal! percentage to each child otherwise the most useless child hates you anyway as a passion. One other option is to max-out i-401k if you have a business or work on 1099. It can go up to $50k+/y.

Ceffer says

If they decide to fight over large amounts, it's usually the lawyers who win the estate through endless fees and procedures, while the relatives are left with their insane rages.

Valid points. It's not perfect, but that's why I said be careful with what you give while alive. Giving too much while alive and they'll all expect it when you're dead. It's just my sister and I, and anticipate getting a 50/50 split of what my mom has. But I don't need it and wouldn't have anger over it and I was left out. My sister and I are good with that.

My MIL on the other hand has 5 daughters and 10 grandkids. My wife and I don't need a dime, but it's going to be a complete shit show when MIL passes. Not for us because we don't care, but there's going to be a shit ton of infighting. She's handed out way too much to my SIL's and they just expect it at this point. My wife makes more than all 4 of her sisters combined. They're frankly helpless. And that's where the grift starts.

That's why I'd avoid giving family money unless it's contractual while you're alive. My one SIL is currently fucking that up to the tune of $60k. They're all 30+ and my wife is the only one that handles her own health insurance personally. Car insurance. Cell phone. It's disgusting. I try not to get angry but it pisses me off. I've cooled down over the years as I don't want the life they're living. The end is going to be messy. My dad didn't give client info, but he told me plenty of horror stories about people passing. As a kid of an attorney I had my fair share of death threats. Not being hyperbolic either.

https://www.cnbc.com/2023/02/16/consumer-debt-hits-record-16point9-trillion-as-delinquencies-rise-as-well.html

Consumer debt hits record $16.9 trillion as delinquencies also rise

https://finance.yahoo.com/m/95c0c8ff-a236-3f51-b32e-436f8f5f2079/zillow-signals-more-pain.html

Zillow Signals More Pain Ahead in Online Real Estate

Non paywall link:
https://archive.ph/IgFdU